Stocks Finish Lower
Stocks closed lower on Thursday as investors used some disappointing results from technology companies as an excuse to take profits.
The Dow Jones industrial average eased 0.44 points to 10,623.18, a day after marking a new 52-week high. The broader Standard & Poor's 500 index shed 3.67 points, or 0.32%, to 1,143.94. The tech-heavy Nasdaq composite index was the biggest loser among the major market benchmarks, falling 23.44 points, or 1.09%, to 2,119.01.
By the close of Thursday's session, traders had already turned their attention to Friday's earnings calendar, which includes a number of big names. Among them are energy provider Dominion (D ), consumer products company Fortune Brands (FO ), air carrier Northwest (NWAC ), auto parts outfit Visteon (VC ) and forest products giant Weyerhaeuser (WY ).
There are no major economic reports scheduled for Friday.
Among the companies causing tech investors to fret on Thursday was Sandisk (SNDK ), which develops digital memory for use in cameras and other products. It warned gross margins in the first quarter would not match those of previous quarter.
Casting a pall over the telecom sector was AT&T (T ), the largest U.S. long-distance carrier, which reported lower fourth-quarter net income due to weak customer demand and price competition.
"I think we are seeing the beginning of a retracement in prices," Paul Cherney, S&P market analyst, said in a note to investors.
Keeping losses under control for the Dow was photo giant Eastman Kodak (EK ), which said it would cut its work force by 20%, or as many as 15,000 jobs and book $1.7 billion in related charges over the next three years, as part of its new strategy to focus on digital rather than film photography.
Not all tech news was bad. Online auctioneer Ebay (EBAY ) posted expectation-topping quarterly results and 2004 revenue will approach $3 billion, above the $2.9 billion consensus estimate.
And mobile phone maker Nokia (NOK ), posted higher earnings due to rising demand for mobile phones and networks.
In other equities news, Ford Motor (F ), the No. 2 carmaker, reported a higher, $793-million net loss for the fourth quarter as costs related to job reductions in Europe and a restructuring of its deal with its former parts unit offset improved auto and finance unit results.
In the drug arena, Wyeth (WYE ) reported 79% lower fourth-quarter earnings as declining sales of its female hormone replacement products and special charges offset strong sales of other drugs.
And Pfizer (PFE ) posted 79% lower profit for the fourth quarter due to its purchase of Pharmacia as well as other one-time items.
BellSouth (BLS ), the third biggest local telephone company reported higher fourth-quarter profit thanks to sales of wireless, Internet access and multi-service packages.
Southwest Airlines (LUV ) reported 57% higher fourth-quarter profit on 8.3% higher revenues.
Discount broker Charles Schwab (SCH ), saw a big jump in its quarterly profit.
On the economic data front, the job market showed signs of strengthening as new jobless claims fell more than expected in the week ended Jan. 17 to 341,000, which was the lowest since January 2001, from a revised 342,000 in the prior week.
Bonds finished higher in price on the weakness in equities. Informa/MMS said Treasuries were making new highs across the curve. Treasuries had moved sideways for much of the session, but then took off ahead of noon, though flows were light. The drop in weekly jobless claims was ignored, according to Informa/MMS.
European stock markets closed mixed Thursday. London's Financial Times-Stock Exchange 100 index eased 34.40 points, or 0.76%, to 4,476.80 on reports that December house prices rose at their strongest pace in 13 months, heightening fears that the Bank of England will raise rates soon to blunt the inflation trend. But some investors were encouraged by a report that manufacturing and services growth revived in the fourth quarter.
In Paris, the CAC 40 added 19.22 points, or 0.52%, to 3,695.60 with help from a report that French consumer spending rose 0.2% in December.
Germany's DAX index gained 1.82 points, or 0.04%, to 4,139.86 as there was little reaction to a report that German retail sales fell 1% last year. German bankers say that the higher currency is unlikely to dent the economic recovery.
In Japan, the Nikkei 225 index lost 1.69 points, or 0.02%, to close at 11,000.70.
Hong Kong's market was closed for the Lunar New Year celebration.